Nvidia has shown interest in acquiring SoftBank’s chip manufacturer Arm. Bloomberg reported that the two companies are in early talks. This could mean a big change in the chip market.
SoftBank acquired Arm back in 2016 for $32 billion. Earlier this month, it was reported that they were exploring options to sell or publicly list the company.
The initial plan was to return Arm to the public markets, much later. However, due to poor performance in some of the investments, the plan seems to be on a fast track. The talks between Nvidia and Softbank are only in the preliminary stage, and it is expected that more interested buyers will show up in the weeks to come.
No official word yet
Neither Nvidia nor SoftBank has said anything official about this deal. If it goes through, it will be one of the biggest deals in the history of the semiconductor industry. The price of a deal like this one is not easy to speculate at this stage, but Arm has significantly grown more potent since it was acquired.
The expectation is that there is going to be a high premium on its 2016 valuation. The deal is coming when the market is shifting away from Intel Corp’s x86 processors to Arm-based architecture. Apple is one of the companies planning to shift to Arm chips. Microsoft has expressed a similar interest as well.
The deal could be possible, but one cannot ignore the regulatory approval needed to make this happen. Arm is the creator and licensor of the underlying architecture in most mobile processors. If you own a smartphone, chances are you have an Arm-based chip, as they supply the leading brands.
The company that acquired Arm would need to prove that they will give equal access to the Arm instruction set. Now, we wait and see.